European Markets Rise Ahead Of Germany’s Court Ruling

A two euro coin is seen through a magnifying glass near a picture of German share trading DAX index at Frankfurt's stock exchange, in this photo illustration taken in Rome August 8, 2011. Photo: REUTERS

Most European markets rose Wednesday with investors awaiting Germany's Constitutional Court to approve the euro zone's new bailout fund to help reduce the debt stress faced by the countries in the region.

The French CAC 40 index was up 0.18 percent or 6.29 points to 3543.59. Shares of Credit Agricole SA rose 1.65 percent and shares of AXA SA advanced 1.12 percent.

Investors are focusing on Wednesday's ruling by the German Constitutional Court on the legality of the European Stability Mechanism (ESM) and the fiscal compact. Market players expect that the most likely outcome is that the Court will rule the ESM as legal. At the same time, it could also impose conditions on its future use.

“No one expects the court to block either measure. On the other hand, the court is likely to impose conditions that will highlight Germany’s reluctance in providing more financial aid to struggling EU nations, and its unwillingness to push for further EU integration without the consent of the German people,” DBS Group Research said in a note.

Investors are also focusing on European Commission President José Manuel Barroso’s annual State of the Union speech. He is expected to present his proposals for the euro zone political and banking union.

The Dutch general election will be held Wednesday.

“The Netherlands’ fragmented political system has meant that it often takes months to form new governments and far longer to pass significant reforms. Progress on both austerity at home and support for the periphery will continue to be slow and painful,” Capital Economics said in a note.

A white Fiat van rammed into pedestrians outside enjoying a late afternoon stroll on Las Ramblas in Barcelona on Thursday killing at least 13 people and leaving hundreds injured. The Islamic State group claimed responsibility for the attack.